ICE cotton futures fell more than 1% on Tuesday as the weekly crop progress report showed stronger crop conditions in major cotton-growing US regions, amid ongoing demand concerns about the US-China trade war.
* The most-active cotton contract on ICE Futures US, the second-month December contract , settled down 0.85 cent, or 1.32%, at 63.36 cents per lb. It traded within a range of 62.84 and 64.2 cents a lb.
* The second month contract touched its lowest since July 19 at 62.84 cents.
* The United States Department of Agriculture’s (USDA) crop progress report on Monday said 61% of US cotton was in good to excellent condition, up one percentage point from last week.
* “The crop ratings were the best in many years. The crop is at least a million bales higher than the USDA estimate,” said John Bondurant, a trader in Memphis, Tennessee.
* Earlier this year, the USDA projected the 2019/20 cotton production to rise to 22.5 million bales.
* Cotton prices have been struggling on the back of expectations for higher output amid weaker demand.
* Meanwhile, Trump on Tuesday warned China against waiting out his first term to finalize any trade deal, saying if he wins re-election in the November 2020 US presidential contest, the outcome could be no agreement or a worse one.
* The natural fiber has slid by about 14% so far this year owing to a long drawn trade tiff between cotton’s top consumer China and one of the top producers, the United States.
* While the crop conditions are good, prices will move in a narrow range until we get the August crop report, said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
* Total futures market volume fell by 803 to 14,750 lots. Data showed total open interest rose 365 to 196,114 contracts in the previous session.
* Certificated cotton stocks deliverable as of July 29 totaled 30,522 480-lb bales, unchanged from 30,522 in the previous session.